Chinese Manufacturing Flashes A Surprise. Manufacturing activity is accelerating again in the world's second largest economy. The HSBC China Flash PMI jumped to 50.8 in June from 49.4 in May. This was stronger than the 49.7 expected by economists. "This month's improvement is consistent with data suggesting that the authorities' mini-stimulus are filtering through to the real economy,” HSBC economist Hongbin Qu. “Over the next few months, infrastructure investments and related sectors will continue to support the recovery. We expect policy makers to continue their current path of accommodative policy stance until the recovery is sustained.”

Eurozone Manufacturing Decelerates. The Markit Eurozone Flash manufacturing PMI slipped to 51.9 in June from 52.2. Still, any reading above 50 signals growth. "The June PMI rounded off the strongest quarter for three years, but a concern is that a second consecutive monthly fall in the index signals that the eurozone recovery is losing momentum," said Markit's Chris Williamson. "Hopefully the recent stimulus measures from the ECB will help revive growth again, something which may already be evident as the survey saw the largest increase in inflows of new business for three years in June."

Germany Is Strong, France Is Ugly. The Eurozone continues to be a tale of two economies. Germany's Flash manufacturing PMI climbed to 52.4 in June from 52.3 in May. But France's Flash manufacturing PMI tumbled to 47.8 from 49.6. "There remained little sign of any turnaround in the performance of France’s economy at the end of Q2, with output falling for a second successive month and at a faster rate," said Markit's Paul Smith. "The data are consistent with another disappointing GDP outturn for Q2 following stagnation in the first quarter."

And Then There's The US... Markit's U.S. Flash manufacturing PMI report will be released at 9:45 a.m. ET. Economists surveyed by Bloomberg estimate this activity index slipped to 56.0 in June from 56.4 in May. But some are more optimistic. "We forecast another rise in the Markit PMI in June," said UBS's Sam Coffin who forecasts an increase to 57.5. "Early indications of June factory activity have pointed to continued strength, as the NY and Philadelphia Fed measures rose from already high levels."

Markets. The good news from China appears to have been more than offset by the bad news out of Europe. In Europe, Britain's FTSE 100 is down 0.3%, France's CAC 40 is down 0.3%, Germany's DAX is down 0.4%, and Spain's IBEX is down 0.1%. In Asia, Japans Nikkei closed up 0.1% while Hong Kong's Hang Seng closed down 1.7%. U.S. futures are modestly in the red.

In Which The U.S. Beats Germany. We're not talking about World Cup soccer. After months of dealing, General Electric beat out Siemens-Mitsubishi to buy out the energy assets of French conglomerate Alstom. The complicated deal included piece for the French government. "France won an option to buy 20 percent of Alstom from construction group Bouygues on Sunday, in an eleventh-hour deal clearing the way for the agreed sale of Alstom's energy business to General Electric," reported Reuters' Benjamin Mallet and Laurence Frost. "The government had backed the tie-up on condition that it first secured the Alstom stake from Paris-based Bouygues - leaving less than three days to negotiate an agreement before GE's formal offer [expired] on Monday."

French Bank Faces $9 Billion Settlement. "French bank BNP Paribas SA is likely to pay $8 billion to $9 billion as part of a potential settlement with U.S. authorities over violations of sanctions, according to a person familiar with the matter," reported Reuters Karen Freifeld. "U.S. authorities are probing whether BNP Paribas evaded U.S. sanctions relating primarily to Sudan between 2002 and 2009, and whether it stripped out identifying information from wire transfers so they could pass through the U.S. financial system without raising red flags, sources have said."

American Apparel Drama Heats Up. "The independent directors of maverick retailer American Apparel Inc have rejected a demand to meet and reinstate ousted CEO Dov Charney on Monday, a source close to the matter said," reported Reuters' Nadia Damouni and Jeffrey Dastin. "The board last week stripped Charney of his titles of chief executive, chairman and president. Initially known for insisting on manufacturing clothing in the United States, Charney eventually became notorious for conduct like attending meetings in his underwear. American Apparel's board cited Charney's alleged misuse of company funds and role in disseminating nude photos of an ex-employee who had sued him."

And Then There's That Other American Apparel Company. According to the WSJ's Suzanne Kapner, Joann Lublin and Dana Mattioli, Lululemon founder Chip Wilson is working with Goldman Sachs to figure out ways to fix the yoga pants maker. "Among the founder's possible options are selling his stake or joining with a private-equity firm in a buyout, other people familiar with the matter said," WSJ reports. "So far, Mr. Wilson hasn't made any decisions on further steps, said a person familiar with his thinking who wouldn't elaborate on what is under consideration."

Existing Home Sales. The may existing home sales report will be published at 10:00 a.m. ET. Economists estimate sales climbed 1.7% to an annualized rate of 4.73 million. "Existing home sales have slumped since August of last year due to a low inventory of homes, less investor buying, and recently, adverse weather conditions," said Nomura economists. "The pending home sales index, which tends to lead existing sales by a couple of months, has increased for two consecutive months after slumping for the previous eight, and suggests that the existing homes market may be stabilizing."

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